It seems to be evident, that negotiations have been finalized . In the sand-blown wasteland 15 kilometers northeast of Abu Dhabi will house the world's largest aluminum smelter, a US$8 billion (€ 6 billion) joint venture launched Thursday that will have the capacity to produce some 1.4 million tons of aluminum per year.
US$300 million (€223 million), the value of the initial construction management contract, was awarded at Thursday's groundbreaking ceremony to engineering firms SNC-Lavalin of Canada and Worley Parsons of Australia.
The project would go a long way toward supplying a shortfall in world aluminum supply said Kelly Driscoll, a metallurgy expert with the London-based consultancy firm CRU.
But Driscoll warned that too much capacity, too quickly, could result in an oversupply that might bring aluminum prices below the cost of production.
The overall project is owned by Emirates Aluminum, a joint venture between the Dubai Aluminum Company and the Mubadala Development Co., the investment and development arm of the government of Abu Dhabi emirate.
It is planned that the first of two construction phases is expected to be finished by 2010 at a cost of US$5 billion (€3.7 billion), according to a press release issued at the site Thursday. The first phase will allow for the manufacturing of 700,000 tons of aluminum per year, while the second phase will double that production capacity, the statement said.
The smelter project "will propel the UAE onto the global industrial stage," said Khaldoon Khalifa Al Mubarak, Mubadala's chief executive.